Strong growth predicted for digital packaging

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The packaging and label printing sector is set for steady growth through to 2027, with digital packaging printing likely to perform especially well.

Business intelligence firm Smithers has predicted a compound annual growth rate (CAGR) of over 10% for digital print for packaging for the next five years.

Revealing the findings of itsThe Future of Package Printing to 2027study, Smithers also predicted steady growth for the label and packaging industry altogether, which it estimated would see a compounded growth rate of 3.1% annually.

These predictions would take labels and packaging from a $456.3bn (£394.2bn) global market in 2021 to $551.3bn in 2027 (ignoring inflation).

Smithers said several long-term factors, such as global population growth, economic development and urbanisation were behind this expansion.

The particularly strong growth in digitally printed packaging, Smithers said, would be aided in no small part by significant R&D investment from machine manufacturers.

Mike Beese, managing director of digital printer Dectek, has seen a strong upswing in digital packaging demand, to the point that the company “can’t deal with the [number of] enquiries”.

He toldPrintweekthat the explosion in e-commerce during the pandemic, especially from small, cottage-industry vendors or manufacturers, had driven exactly the low-volume, on-demand runs in which digital printing thrives.

“It’s a huge advantage,” he said of using digital for working with these boutique businesses.

“This is an opportunity - a little bit like the banks did with students, where they throw everything at them, and then the students remain with the bank for their life. 

“So we do the same with these new start-ups, we look after them, coach them, and support them. And these grow from small orders into larger orders.

“They’ve been very loyal. We’re forming great partnerships.”

The speed at which Dectek can provide prospective customers with high-quality physical proofs, too, has made it easy to impress customers - and secure their business, Beese added.

“Within three days they have a finished product, which has been no cost to them - no headache, very low input. And when we add the digital effects and embellishments, it gets the wow factor - so we can engage with the client at speed, and basically wrap the sale up.”

While the report predicted significant expansion for digitally printed packaging, however, it also confirmed flexo’s place in packaging print, saying that it was likely to remain the most widely used print process.

As of September 2022, flexo represents about 36% of the market, and the report predicted natural expansion would give it 2.4% CAGR over the next five years, thanks to its popularity for long-run corrugated board, labels and flexible plastics work.

Other analogue processes, including offset litho (2.5% CAGR) will also see similar organic growth, it said, though mainly from developing markets.

The report also highlighted a number of challenges that the sector will face, including sustainability, adapting to on-demand purchasing patterns, and making print supply more resilient.

Paul Ewing, author of the report and associate consultant at Smithers, said: “The biggest challenges lie in the field of sustainability and improving the sustainability of printed packaging throughout its lifecycle.”

The ability to print on newly-developed sustainable substrates, for example, will be of growing importance, alongside the adaptation away from single-use plastics and towards improved recyclability.